Permissible Capital Payment (PCP) relates to how much cash or other financial considerations a company is allowed to return to shareholders according to legal or regulatory standards, primarily through processes such as share buybacks or reductions in capital.
A stock repurchase plan, also known as a share buyback, is a program by which a corporation buys back its own shares from the open market. Typically deployed when shares are perceived as undervalued, this practice reduces the number of shares outstanding, thus raising earnings per share (EPS) and potentially increasing the market value of the remaining shares.
